USDA on Wednesday released its February Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports.
Farm Director, KC Sheperd, caught up with Allendale’s Rich Nelson and talked about the numbers in this latest WASDE report.
“For the most part, USDA gave us kind of what that trade was expecting here in today’s discussion,” Nelson said.
Nelson said wheat ending stocks saw a very minimal change from 567 to 568 million bushels. Wheat export sales are an issue right now, Nelson said, and those export numbers should be lowered in the future.
“Focus for us for this report would be on South America numbers and no changes to really get excited about on the Brazil side,” Nelson. “The trade will point out that USDA did drop Argentina corn production 5 million tons on this report, just a little lower than the average trade guess. “
Later on this month on March 30, the Perspective Plantings Report will be released and Nelson said his estimates are up 1.4 million acres for corn and up 1.6 million acres for soybeans. Those numbers could drop for cotton, he added.
USDA raised domestic corn ending stocks by 25 million bushels (mb) to 1.267 billion bushels (bb). It also boosted soybean ending stocks for the 2022-23 marketing year to 225 mb, 15 mb higher than last month.
USDA left Brazilian crop forecasts unchanged at 153 million metric tons (mmt) of soybean production and 125 mmt of corn. It trimmed Argentina’s soybean crop estimate by 4.5 mmt to 41 mmt and its corn estimate by 5 mmt to 47 mmt.
You can also access the full reports here:
— Crop Production: https://www.nass.usda.gov/…
— World Agricultural Supply and Demand Estimates (WASDE):
USDA estimates for U.S. 2022-2023 wheat ending stocks were increased to 568 mb, below the pre-report estimate of 579 mb. USDA left wheat exports the same at 775 mb.
The average U.S. farmgate price for wheat was pegged at $9.00 per bushel, down from $9.10 from the January report.
USDA estimates world wheat production at 783.8 mmt, an increase from 781.31 mmt in January. There was disagreement heading into report day between what USDA expected at 781.31 mmt versus the 796 mmt from the International Grains Council.
Wheat exports from Russia were estimated at 43.5 mmt, an increase from 43 mmt last month, while USDA estimates Ukraine exports at 13.5 mmt, an increase from 13 mmt in January.
USDA’s estimates world ending wheat stocks at 269.34 mmt in February, a slight bump up from 268.39 in January.
USDA increased soybean ending stocks to 225 mb, up 15 mb from last month, reflecting a 15 mb decline in estimates of U.S. crush. All other demand estimates were left unchanged. The national average farm gate price rose by a dime to $14.30 per bushel.
Globally, USDA trimmed ending stocks by 1.5 mmt. It left Brazilian production unchanged at 153 mmt, but lowered Argentina’s output by 4.5 mmt to 41 mmt amid ongoing drought concerns. USDA says higher stocks in China will partly offset lower South American supplies.
USDA raised domestic corn ending stocks by 25 mb to 1.267 bb. The agency left production estimates unchanged at 13.73 bb. On the demand side, USDA left exports unchanged, but lowered ethanol usage by 25 mb.
The national average farm gate price was also unchanged at $6.70 per bushel.
Global ending stocks declined by slightly more than 1 mmt, to 295.28 mmt. Brazilian corn production was left unchanged at 125 mmt, while Argentina’s crop was trimmed 5 mmt to 47 mmt on ongoing drought concerns. USDA sees higher production in the Philippines and Vietnam offsetting some of Argentina’s decline. USDA sees higher exports from Brazil, up 3 mmt to 76 mmt.
Wednesday’s WASDE report favored the cattle and beef markets. Beef production for 2023 was raised by 50 million pounds, as the first quarter of 2023 grew by 140 million pounds from last month’s projections, which more than offset the 90-million-pound decline projected for the second quarter of the year. The large production for the first quarter of 2023 stems from aggressive cow slaughter, while the reduction for the second quarter portrays tighter fed cattle supplies.
Price projections for the first quarter of 2023 gained $1.00 to average $158.00 from January’s report, and the second quarter prices grew by $2.00 from January’s report to now be projected at $159.00. Both the third and fourth quarters of the year remained steady at $157 (third quarter) and $162.00 (fourth quarter). Beef imports for 2023 grew by 25 million pounds, while exports remained steady.
Wednesday’s WASDE report shared mixed findings for the pork complex. Pork production fell by 45 million pounds from January’s report as carcass weights are lighter than originally expected. Unfortunately, both the first and second quarters of 2023 saw price decreases compared to January’s report for the anticipated quarterly price projections. Barrow and gilt prices in the first quarter are expected to average $58.00, which is $5.00 cheaper than January’s projection, and second quarter prices are now expected to average $71.00 which is $1.00 lighter than what January’s WASDE report forecasted. Pork imports and pork exports for 2023 both remained steady.